POUND FOOLISH

2 years ago

GM: $400M for Victims’ Families

Jonathan Ernst/Reuters

In its quarterly report Thursday, General Motors’ profitability took a big hit as its net income fell 85 percent from a year ago. The biggest factors were a $1.2 billion recall campaign and the $400 million it estimates will be required to compensate the families of those who died in cars with faulty ignition switches. GM consulted with outside actuaries to determine the cost, but its CFO warned the figure could balloon to as much as $600 million. The money will go to a compensation fund run by Kenneth Feinberg, which will begin accepting claims next month. GM is facing multiple lawsuits over the ignition-switch defect in cars, as well as a fine by the Justice Department, an SEC investigation, and reviews by multiple state attorneys general.